Teladoc Health talks $800 million seven-year convertibles to yield 0.75%-1.25%, up 35%-40%

By Abigail W. Adams

Portland, Me., May 14 – Teladoc Health Inc. plans to price $800 million of seven-year convertible notes after the market close on Thursday with price talk for a coupon of 0.75% to 1.25% and an initial conversion premium of 35% to 40%, according to a market source.

J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC are active bookrunners for the Rule 144A offering, which carries a greenshoe of $120 million.

The notes are contingently convertible until Dec. 1, 2026. They are non-callable until June 5, 2024 subject to a 130% hurdle.

The notes are putable upon a fundamental change. There is dividend protection.

The notes will be settled in cash, shares or a combination of both at the company’s option.

The company will repurchase a portion of its 3% convertible notes due 2022 for cash and shares in privately negotiated transactions.

Proceeds will be used to fund the repurchase of the 3% notes due 2022 with the remaining amount to be used for working capital and general corporate purposes, including the pursuit of strategic acquisitions.

Teladoc Health is a Purchase, N.Y.-based telemedicine and virtual health care company.

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